I'm happy to report I've taken the plunge in commercial real estate. I found 2 office condos that I plan to use as rental property, both have tenants.
I made an offer last month and it was accepted. I close in about 3 weeks. I need to start reconciling monies that have been flying around. I have quickbooks which I use for my main business, but was having a little trouble thinking through how I should be setting this up.
To give you an overview, I setup a new LLC that will own both properties. I also setup a new bank account for this LLC.
I would like to be able to track each property individually for reporting purposes. For example, I want to know how each on of my units is doing as an investment.
I was wondering if anyone can share an online guide or other information on setting up a chart of accounts that is suitable for landlords. In a way I need to track 3 entities.
I just track mine through excel. I keep one tab per property and updated it monthly with income and expenses
@Tom B - Take a look at the IRS schedule E. That's the form where rental income and expenses are reported. Your major expense classifications will be shown on that form. I group some of these together. For example, I see no need to separate "cleaning and maintenance" from "repairs".
You will also want to track your capital improvements. And you will probably want to keep your labor costs separate from your materials so that you can give 1099's to those doing labor for you.
Also, keep a copy of your HUD1 when you buy and sale and also a copy of your fees/expenses/costs related to your mortgage or any refinance that you ever do. Supply these forms to you accountant.
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